On March 10, the National Bureau of Statistics released the national CPI (Consumer Price Index) and PPI (Ex-factory Price Index of Industrial Producers) data for February 2021. In this regard, Dong Lijuan, a senior statistician in the City Department of the National Bureau of Statistics, said that the month-on-month increase in CPI and PPI in February both fell.

In terms of specific data, the CPI in February fell by 0.2% year-on-year, the decline narrowed by 0.1 percentage point from January, and the month-on-month increase was 0.6%, and the increase was 0.4 percentage points lower than that in January; PPI rose by 1.7% year-on-year, and the increase was 1.4 percentage points higher than that in January. Percentage points, up 0.8% month-on-month, 0.2 percentage points lower than that in January.

In terms of CPI, from a year-on-year point of view, food prices have changed from a 1.6% increase in January to a decrease of 0.2%, which affected the CPI drop by about 0.05 percentage points. Non-food prices fell by 0.2%, which was 0.6 percentage points smaller than in January, affecting the CPI drop by about 0.15 percentage points.

Wen Bin, chief researcher of China Minsheng Bank, told a reporter from the Securities Daily that, affected by the Spring Festival, the CPI rose by 0.6% month-on-month in February, but the increase was 0.4 percentage points lower than that in January. Due to the high base in the same period last year, the year-on-year growth rate of CPI in February was still negative, and the rate of decline narrowed by 0.1 percentage point to -0.2% from January. The failure of the CPI to rise is mainly due to structural factors. In February, the year-on-year increase in food prices dropped significantly, among which meat prices dropped significantly. With the improvement of pork supply, combined with higher prices in the same period last year, pork prices in February fell by 14.9% year-on-year, affecting CPI by about 0.39 percentage points, and this growth rate was 150.1 percentage points lower than the same period last year.

According to estimates, of the 0.2% year-on-year decline in February, the carry-over impact of last year's price changes was about -1.8 percentage points, and the impact of new price increases was about 1.6 percentage points. The core CPI, excluding food and energy prices, fell from 0.3% year-on-year in January to flat.

The chief fixed income analyst of CITIC Securities clearly told the "Securities Daily" reporter that affected by the decline in pork prices and the local Chinese New Year initiative, the month-on-month increase in CPI in February fell, and the year-on-year decline narrowed, and inflation was still relatively moderate and controllable. Recently, the central reserve of frozen pork ushered in the ninth release of the year, and the pork supply situation has become more relaxed. The stock of live pigs and breeding sows across the country has increased year-on-year, and the recovery of live pig production is good. It is expected that pork prices will continue to fall.

In terms of PPI, it was clearly stated that in addition to the weakening of cement and other non-metal prices and coal prices, most of the prices of industrial products in the five major industries rose significantly, driving PPI to maintain a high month-on-month increase and PPI to rebound rapidly year-on-year. It is expected that the price of subsequent industrial products will continue to rise or run at a high level, and the superimposed base effect will further accelerate the PPI year-on-year recovery in the next quarter.

From the perspective of monetary policy, Wen Bin said that the trend of PPI and CPI in February further diverged, not only due to the disturbance formed by the high base of CPI and the low base of PPI in the same period last year, but also reflected the blockage in the transmission of price increase from PPI to CPI. In the next stage, the CPI trend is still affected by the structure. Since March last year, my country’s PPI has declined significantly. It is expected that commodities and the base effect will continue to accelerate the rise of PPI.

Article information source-Securities Daily


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